Friday, December 7, 2012

Measures Matter

The metrics we chose to measure matter because they make a difference in whether or not we win.  They make a difference in whether or not we achieve our vision, our strategy and our objectives.

The reasons to measure are pretty straightforward because as Tom Peters says, "What gets measured gets done." But selecting what to measure is bit more complicated and just as critical.  For example, if you're going on a trip from New York to Paris, you may want to get there fastest, or cheapest, or in the most gracious style. If fastest, then you measure speed and total duration of the journey.  If cheapest, then you measure dollars.  If in the most gracious style, then you may have to first understand how you would know.

Similarly, in business, what you measure yields vastly different methods for the same goal.  The Oakland A's shared every baseball team's goal to win but didn't have the budget to recruit players with great batting averages, the typical metric. They found another way to win by measuring something different. They began recruiting players based on on-base percentage and slugging average because they found that these measures were better indicators of offensive success. And sure enough, they won more. Measuring something different from the other teams led to a competitive advantage.

In another example, rather than focus solely on revenue per seat metrics, Southwest Airlines began measuring aircraft turnaround time at the gate to drive a reduction in unit costs. It seems obvious but this change resulted in a competitive advantage for them.

On a professional level, what are you measuring today to determine performance for your self, your department, your charter, your business? How could you find another way to win by measuring something different? Do the current measures drive the results and success that you want?

On a personal level, what are you measuring?  The number of things accomplished, the number of people influenced, business strategies affected? What else could you measure that would result in a better life?

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